Altshuler Shaham Founders Questioned Over Potential Sale Amidst Market Turnaround

Reports suggest that Gilad Altshuler and Kalman Shaham, the founders of the investment house Altshuler Shaham Finances, are considering selling their controlling stake in the company. However, the timing of such a potential sale is being questioned by industry observers, given recent signs of improvement in the company's performance.

Altshuler Shaham Finances, which primarily manages provident funds, has faced significant challenges in recent years, including substantial fund outflows and a decline in market value. The company's market capitalization fell from a peak of over 4.5 billion shekels in early 2021 to around 1 billion shekels in March of this year. Despite these difficulties, the article highlights that recent months have shown positive trends, with improving investment returns and a reduction in fund outflows.

In August, the company led in several provident fund tracks, achieving a 1.9% return in the general track and 3.5% in the equity track. Furthermore, the CEO, Yair Levinstein, noted a nearly 25% decrease in outflows between June and July, indicating a potential positive momentum shift. This turnaround suggests that selling now, at what might be a market low, would be illogical for experienced investors.

Financially, Altshuler Shaham remains profitable, reporting a net profit of 22.1 million shekels in the second quarter and 50.8 million shekels for the first half of the year. The company is also developing new credit activities and exploring additional business engines beyond its core pension and provident fund operations, indicating no immediate liquidity crisis.

The potential sale, reportedly valued at around one billion shekels for the controlling stake, comes at a time when the company's market valuation may not reflect its full potential or future prospects. Observers suggest that selling now would mean forfeiting the potential upside from the ongoing recovery. The article speculates that personal factors, such as age or succession planning, might be influencing the founders' decision, alongside a potentially attractive offer.